When Windows Phone initially launched there were some of us who simply used our existing Hotmail Accounts to sign into the phone. Problem was that some had the account set for the wrong geographic region creating a fair amount of issues.
At that time it was nigh impossible to change the region of the account and thus forced many into a situation where a new account was in need to be created. As our Xbox Live ID or Microsoft Account has become central in everything we do now things have eased somewhat and through a lengthy six week process it has been possible to change region via customer services. Not ideal.
That could all be about to changes as Microsoft is currently piloting an online service to get this done much more rapidly.